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Nokia Siemens Networks to cut about 9,000 jobs

Nokia Siemens Networks, which had previously said it would cut 10-15 percent of its staff since starting operations last month, said on Friday it had begun talks with employees and workers’ representatives in Germany and Finland.

The company repeated it aimed to reach annual savings of 1.5 billion euros ($2 billion), helped in part by the job cuts, as it competes for increasingly scarce business amid slowing spending by telecoms operators.

In Germany, Nokia Siemens Networks aims to cut 2,800-2,900 jobs by end-2010 from 13,000 now, while in Finland 1,500-1,700 jobs would go from a total of 10,000.

Jobs would also be cut in other countries, the company said, without elaborating.

A spokesman for German trade union IG Metall said the union had requested more information and protests were not ruled out.

Harri Kolula, senior employment relations official at Finland’s Union of Salaried Employees said: “As we are talking about a financially stable company, lay-offs should be avoided. Moving people to new positions within the company must be the primary aim.”

“I would not yet talk about possible strikes. But obviously such announcements weaken the mood for negotiations,” he added.

Nokia Siemens Networks, which recorded 2006 pro-forma revenues of 17.1 billion euros, aims to challenge the top industry players, such as Sweden’s Ericsson, which leads the market in mobile infrastructure.

The new group trimmed its forecast for the telecoms infrastructure market in April, saying it would grow only very slightly in euro terms this year.

“Many of our customers are facing intense cost pressure, relentless competition, and new business models,” Christoph Caselitz, the firm’s chief marketing officer, said in a statement on Friday.

“We must make the tough changes necessary to adapt to this reality and lower the cost of connectivity.”

Nokia and Siemens merged their networks business partly to be able to better weather periods of slow growth by sharing high fixed research and development costs and reducing overheads.

Rival Alcatel-Lucent plans to cut 12,500 jobs or 16 percent of its staff by 2008.

Nokia Siemens Networks had been due to start operation at the beginning of the year, but was delayed by a corruption investigation at Siemens.

Shares in Nokia were 26 cents lower at 18.62 euros after the shares went ex-dividend, compared with a slightly firmer DJ Stoxx European technology index.

Shares in Siemens were 0.9 percent lower in Frankfurt.